June 2nd, 2010

Ben Chu: Cameron admits the true purpose of inheritance tax cuts

A smart point from David Cameron at PMQs in response to Harriet Harman's probing over marriage tax relief.

The Prime Minister pointed out that the previous Government itself "recognised" marriage in the tax system when it legislated  in 2007 to permit individuals to claim their late partner's inheritance tax allowance.

"If recognising marriage in the tax system is such a good thing for the better-off", asked Mr Cameron to Commons cheers, "why do we not do it for the less well-off?"

A nice way to puncture Labour's hypocrisy. But it was interesting that Mr Cameron argued that inheritance tax cuts benefit "the better off". As I recall, the Tory rhetoric on this has been that cutting inheritance tax is all about encouraging "aspiration" for all, rich and poor alike. Isn't this an admission that, at heart, it's just a bung to the already wealthy?

Mr Cameron has shelved the pre-election Tory plan to raise the inheritance tax threshold to £1m. But if it ever resurfaces, perhaps today's admission should too.